Committee on Financial Services - mars-5:hrs05F_S2128_080214.2 - Rayburn 2128 - The State of the Bond Insurance Industry (Part 2 of 2) - Capital Markets, Insurance, and Government Sponsored Enterprises Subcommittee. The Capital Markets Subcommittee meets today to learn about the causes and effects of recent bond insurer ratings downgrades. We will, in particular, focus on the spillover effects for municipalities and the financial services industry. Bond insurance represents a microscopic segment of the insurance marketplace. In 2006, bond insurers collected less than onethird of a percentage point of the total premiums collected by the insurance industry. We now know, however, that even though it is very small, the importance of the bond insurance industry is significantly greater. Its recent volatility, unless quickly addressed, could produce many negative consequences and affect the financial stability of the broader economy.

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